About the Bond Price Calculator
A bond’s price is the present value of all the coupon payments it still has to make plus the face value repaid at maturity, discounted at the yield the market currently demands. This bond price calculator does that discounting for you and shows the price in money and as a percentage of par, whether the bond trades at a premium or a discount, its current yield, and its Macaulay and modified duration.
It is useful for investors comparing a bond quote with prevailing yields, students learning bond valuation, and anyone who wants to see how much a bond’s price would fall if interest rates rose. The price-yield chart makes the inverse relationship visible: when yields go up, prices go down, and longer bonds move more.
The calculator values the bond on a coupon payment date (the “clean” price with no accrued interest) and assumes all payments are made in full and on time. For Treasury bonds and most US corporates coupons are paid semi-annually, which is the default.
With the default inputs, the bond price is $925.61. Change any value above to recalculate instantly.
How to use the bond price calculator
- 1Enter the bond’s face value (usually $1,000 or 100).
- 2Enter the annual coupon rate printed on the bond.
- 3Enter the current market yield for similar bonds.
- 4Enter the years left to maturity and the coupon frequency.
- 5Read the price, then use the chart to see how it changes with yields.
Formula and method
Each coupon C (face value × coupon rate ÷ m) is discounted at the periodic yield y/m for the number of periods until it is paid, and the face value F is discounted from the final period n = years × m. Adding those present values gives the price. When the coupon rate is above the market yield the price is above par (a premium); when it is below, the price is below par (a discount).
Macaulay duration is the present-value-weighted average time until the cash flows are received, in years. Modified duration divides it by (1 + y/m) and approximates the percentage price change for a one-percentage-point change in yield. Current yield is simply the annual coupon ÷ price.
- C
- Coupon per period (F × coupon rate ÷ m)
- F
- Face (par) value repaid at maturity
- y
- Annual yield to maturity
- m
- Coupon payments per year
- n
- Total number of coupon periods
Worked examples
5% 10-year bond when yields are 6%
Twenty semi-annual coupons of $25 and $1,000 at maturity, discounted at 3% per half-year, are worth $925.61. Because the 5% coupon is below the 6% market yield, the bond sells at a $74.39 discount, and its current yield is about 5.40%.
4% annual-pay 5-year bond when yields are 3%
With yields at 3%, a bond paying $40 a year is worth more than par: $1,045.80. Buyers pay a $45.80 premium, which is gradually lost as the price pulls back to $1,000 at maturity.
30-year bond quoted per 100
A 3.5% 30-year bond priced to yield 4.25% is worth 87.35 per 100 of face value. Its modified duration of about 17.6 means a one-point rise in yields would cut the price by roughly 17%.
Frequently asked questions
Why do bond prices fall when interest rates rise?+
A bond’s coupon is fixed. When new bonds offer higher yields, an existing bond with a lower coupon is only attractive at a lower price, so its price drops until its yield matches the market. The reverse happens when rates fall.
What is the difference between coupon rate and yield to maturity?+
The coupon rate is the fixed interest paid on the face value. Yield to maturity is the total annual return you earn if you buy at today’s price and hold to maturity, including the gain or loss as the price moves to par.
What is a bond premium or discount?+
A bond trades at a premium when its price is above face value, which happens when its coupon exceeds current market yields. It trades at a discount when its price is below face value because its coupon is below market yields.
What does duration tell me?+
Modified duration estimates how much a bond’s price changes for a 1 percentage point move in yields. A duration of 7 means roughly a 7% price drop if yields rise by 1 point. Longer maturities and lower coupons mean higher duration.
Is this the clean or dirty price?+
It is the clean price on a coupon date, with no accrued interest. If you buy between coupon dates you also pay the seller the interest accrued since the last coupon, which makes the invoice (dirty) price higher.
Results are estimates for educational purposes and are not financial advice. Rates, fees and terms vary — confirm with your lender or a licensed advisor before making decisions.
Sources